46 U.S.C. § 31326 Court Sales to Enforce Preferred Mortgage Liens and Maritime Liens and Priority of Claims

• Library: United States Statutes
• Edition: 2023 Edition
• Currency: Current through P.L. 118-19 (published on www.congress.gov on 10/06/2023)
• Citation: 46 U.S.C. § 31326

(a) When a vessel is sold by order of a district court in a civil action in rem brought to enforce a preferred mortgage lien or a maritime lien, any claim in the vessel existing on the date of sale is terminated, including a possessory common law lien of which a person is deprived under section 31325(e)(2) of this title, and the vessel is sold free of all those claims.

(b) Each of the claims terminated under subsection (a) of this section attaches, in the same amount and in accordance with their priorities to the proceeds of the sale, except that-

(1) the preferred mortgage lien, including a preferred mortgage lien on a foreign vessel whose mortgage has been guaranteed under chapter 537 of this title, has priority over all claims against the vessel (except for expenses and fees allowed by the court, costs imposed by the court, and preferred maritime liens); and

(2) for a foreign vessel whose mortgage has not been guaranteed under chapter 537 of this title, the preferred mortgage lien is subordinate to a maritime lien for necessaries provided in the United States.

Cite as 46 U.S.C. § 31326

Source: Pub. L. 100-710, title I, §102(c), Nov. 23, 1988, 102 Stat. 4746; Pub. L. 103-160, div. A, title XIII, §13601360,, 107 Stat. 1816; Pub. L. 109-304, §15(31), Oct. 6, 2006, 120 Stat. 1704.

Notes from the Office of Law Revision Counsel

current through 7/7/2023

<TABLE> <TR><TD colspan="2">HISTORICAL AND REVISION NOTES</TD> </TR> <TR> <TD>Revised section</TD> <TD>Source section (U.S. Code)</TD> </TR> <TR> <TD>31326(a)</TD> <TD>46:953(b), 961(c)</TD> </TR> <TR> <TD>31326(b)(1)</TD> <TD>46:953(b)</TD> </TR> <TR> <TD>31326(b)(2)</TD> <TD>46:951 (2d par. proviso)</TD> </TR> </TABLE>

Section 31326(a) provides for a court-ordered sale to enforce a preferred mortgage lien or a maritime lien and the priority of claims. When a mortgaged vessel is sold by court order in a civil action in rem, any prior claim in the vessel is terminated-including any possessory common law lien. This subsection makes a substantive change to law by making the process the same for maritime liens as was provided for preferred mortgage liens. This eliminates the requirement for making a new mortgagee for a court sale to enforce a maritime lien. This section also broadens the jurisdiction to courts in the territories, as defined in section 31301.